Tax information
The following information is intended to provide general guidance to individuals who are UK-resident shareholders in Barclays PLC and is not intended to be a substitute for professional advice. Shareholders who are not resident in the UK should take advice locally from their professional adviser.
Income tax – dividends
For the tax year ending 5 April 2009, dividends from Barclays PLC carry a notional tax credit equal to one-ninth of the cash sum paid.
Shareholders who pay tax at the basic rate (20 per cent) will have no further liability to tax.
Non-taxpayers will be unable to make a claim for repayment of the notional tax credit.
The position of higher rate taxpayers is as follows (using a cash dividend of £90 as an example):
| £ | |
| Cash dividend | £90.00 |
| Tax credit | £10.00 |
| Income | £100.00 |
| Higher rate tax* | £(32.50) |
| After-tax income | £67.50 |
* The higher rate itself is 40% but a special rate of 32.5% applies to income from UK dividends. Tax payable under self assessment is £22.50 (made up of £32.50 less the tax credit of £10.00).
Shareholders whose dividends are paid directly to a bank or building society account will receive, in mid-March each year, a single tax voucher relating to all dividends paid in the year. The tax voucher should be kept safely as it will help when completing tax returns.
Capital Gains Tax
Capital Gains Tax (CGT) may be payable by individuals on gains made from the disposal of Barclays shares.
Each individual has an annual (non-cumulative) exemption, which for the tax year 2008/2009 is £9,600 of chargeable gain and for the tax year 2009/2010 increases to £10,100 of chargeable gain. Where payable, CGT is levied at a single rate of 18% with effect from 2008/2009, rather than at an individual’s top rate of tax. This change coincides with the withdrawal of taper relief and indexation allowance, which are no longer available for disposals made on or after 6 April 2008.
Example calculation for Capital Gains Tax
Mr Smith bought 1,000 shares in November 1991 at a cost (including dealing costs) of £3,575. He sells the shares in January 2005 and realises (again after dealing costs) £21,500. He owned no other shares in the period.
| 2008/2009 | 2009/2010 | |
|---|---|---|
| Calculation | £ | £ |
| Net Proceeds | 21,500 | 21,500 |
| Deduct Cost | (3,575) | (3,575) |
| Gain | 17,925 | 17,925 |
| Annual Exemption | (9,600) | (10,100) |
| Chargeable gain | 8,325 | 7,825 |
Capital Gains Tax can be relatively complex, particularly where shareholdings are built up over a period of time and where part disposals out of existing shareholdings are made. Shareholders should take professional advice in these circumstances.
Details on tax issues which may affect shareholders. This information should not replace professional advice.
